Huawei’s semiconductor subsidiary is proving to be a strong competitor to Taiwan’s MediaTek.

Huawei’s subsidiary HiSilicon may unseat its Taiwanese competitor MediaTek as the top integrated circuit (IC) designer in Asia in 2019, according to DigiTimes, a Taiwanese newspaper with a focus on the semiconductor industry.

Shenzhen-based HiSilicon’s annual revenue has grown from USD 5.6 billion in 2017 to USD 7.6 billion in 2018, a 34.2% increase. MediaTek, meanwhile, booked USD 7.9 billion revenue with just 0.9% growth last year. MediaTek and HiSilicon are among the top 5 IC design houses globally by revenues and the biggest two in Asia. Other major players are companies like Broadcom and Qualcomm.

HiSilicon’s fast growth is mostly attributable to Huawei’s smartphone growth, Zhu Shaoxin, deputy director of the IC Industry Research Institute in Beijing told KrASIA. The Chinese telecoms giant’s smartphone shipments have gone up 33.6% to 206 million units in 2018, according to IDC.

With Huawei’s plans to become the world’s largest smartphone maker and to further expand the application of its HiSilicon chips to other devices such as smart TVs, HiSilicon is bound to dethrone MediaTek in Asia, according to Zhu. “There’s no doubt that HiSilicon will overtake MediaTek, eventually,” he said, adding that he’s not sure if it will happen this year.

Even though there was only a slim revenue gap between MediaTek and HiSilicon in 2018, MediaTek could expect growth in the smart speaker market. A potential Apple contract could also help it keep its Asia top dog status, industry insiders told KrASIA.